If the inflation rate is 5 percent and the real interest rate is 2.5 percent, then the nominal interest rate is
A) 10 percent. B) -2.5 percent. C) 2.5 percent. D) 7.5 percent. E) 2 percent.
D
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Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?
A) If the firm does not exit the industry in the long run its demand curve will shift to the right. B) The firm could exit the industry in the long run. C) If the firm remains in the industry in the long run it will break even. D) If the firm does not exit the industry in the long run its demand curve will shift to the left.
According to the horizontal-equity principle of taxation
A) individuals who receive the benefits of a good or service should bear a greater share of the tax burden. B) people in the same economic situation should be treated equally. C) individuals who are willing to bear a greater share of the tax burden should be compensated with non-monetary benefits. D) individuals who are most able to pay should bear a greater share of the tax burden.